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17 Jul 2013

Innovation within the visitor economy

VisitEngland are currently inviting contributions to a discussion on 'innovation' within the visitor economy.

They ask questions such as: What do you understand by innovation in the visitor economy? What are the barriers to innovation? How can the sector stimulate innovation to support growth? And invite you to share your thoughts, examples and questions with other professionals from within and outside the sector.

The paper written to introduce this topic is reproduced here:1. Innovation in Tourism

The Strategic Framework for Tourism in England identified that “tourism is fertile ground for entrepreneurs”. Entrepreneurs are creative, responsive to market opportunities and illustrate innovation to generate wealth and employment opportunities. To maximise the opportunities for growth and encourage greater levels of entrepreneurs entering the tourism market place we need to understand the factors that allow entrepreneurs to flourish and how to influence the environment for greater innovation in tourism.

Innovation is the process by which new ideas are successfully exploited to create economic, social and environmental value. (DBIS)

Innovation can also be described as the creation and deployment of better more effective products, processes, services, technologies or ideas that are widely accepted by businesses and society. It is different from invention as innovation refers to the use of the new idea whereas invention refers only to the creation of the idea or concept itself.

It is a common belief that where economic growth is achieved innovation has been a catalyst. This is supported by the level of significance the UK Government places on innovation, describing it as a key driver for growth.

Understanding and driving innovation in tourism has historically been a challenge for a number of factors but the predominance of small to medium sized enterprises is a large contributing factor. Innovation may have happened but at a small scale that does not have the significant step change required for scalable economic growth.

The different spatial levels in which tourism takes place may be a barrier to innovation taking place with disparate networks or variable support available in different areas. For example, in rural areas could be affected with access to broadband or business support networks potentially hindering the potential.

Are other factors a lack of understanding of innovation in tourism by policy makers, a poor environment for innovation to take place, a lack of insights or poorly connected relationships that would enable innovation to have a greater impact on a wider basis? The British Tourism Framework Review noted information gaps as a market failure where businesses did not have access to the relevant insights in order to influence their decision making.

In the current economic conditions, unlike other sectors, the Visitor Economy has the potential to grow. Without innovation there is a potential that this growth is only marginally achieved or maybe not sustained. The sector needs to establish a greater understanding of innovation to realise its full potential.

Context

Over 200,000 businesses are active in the visitor economy, of which 80% are SMEs, and there continues to be a high level of enterprise and business creation. The tourism industry typically has low barriers to entry and attracts entrepreneurial activity, starting up new small and medium size businesses. The number of registrations of new businesses related to the visitor economy accounts for 11.5% of the registrations for all businesses in the UK – well in excess of its share of the UK GDP.

The OECD have discussed innovation in tourism (http://www.oecd.org/dataoecd/55/31/34267947.pdf) highlighting that a most successful and promising vehicle for innovation in tourism industry can be achieved through co-operation, alliances and/or networks in areas such as technology, marketing, distribution, and human resource sharing.

Existing entrepreneurs in tourism have realized that innovation is a key element to survive and compete in a dynamic and radically changing environment.

Creating an environment for greater innovation has been an aspiration of many governments in developed countries with varying success. Research by Learner illustrates the challenges of a top down approach to stimulate innovation and the disconnect between policy makers and entrepreneurs in the market place. There are clearly lessons in other sectors that tourism can benefit from.

Proposal

Innovation in tourism needs to be explored further to understand the potential and maximise the growth opportunities for the Visitor Economy in England. It is proposed that innovation is explored through a number of stages that will ultimately facilitate an environment that allows for innovation to be created at a local level.

Understand the conditions in which innovation can take place and the factors that can stimulate its development.

Process

Three phases of activity will shape our collective understanding of innovation and enable progress to be made in a structured way. In taking this approach we hope to build on existing learning and create an environment where policy makers, businesses and local tourism managers can inspire growth through innovation.

Think Tank – what do we mean by innovation

This should be a high level focused workshop that will establish the key thinking behind innovation and be the basis of the next stages of discussion and implementation. This work will be the foundation of for achieving the overall objectives of the project.

Audience

• Entrepreneurs – in tourism and from wider economic backgrounds

• Representatives from entrepreneur networks and/ or business angel networks (NB these are not exclusively tourism networks normally)

• Academics

Objectives

• Explore and establish a common understanding on the meaning of innovation in tourism that can be used as a basis for further discussions.

• Establish factors that can stimulate innovation in tourism.

• Identify the barriers to innovation and what entrepreneurs need to know to invest and thrive?

National conference – Innovation in Tourism

Developed in partnership between VisitEngland and YNYER LEP this conference will present findings from the think tank and allow for these concepts to be tested with a wider audience.

Audience

• DMOs, LEPs, LAs, Private sector.

Objectives

• Test the concepts raised in the innovation think tank

• Stimulate debate and motivation to create more innovation in tourism across the country.

• Identify roles and responsibilities for each stimulator of innovation (i.e. what can VE, LEPs, DMOs or LAs do to stimulate private sector innovation).

Sub national conference - YNYER – making innovation happen

From reflections of what can make innovation happen the LEP will need to consider the stimuli and package of activities required. This sub national conference can help to disseminate the pack of activities and show case examples of innovation already taking place in the area as examples to motivate others.